Goliath has Fallen

Week ended January 20, 2023, interesting news items to look at this week were:

1. Goliath has Fallen: US Federal Law Code Title 10 Code 8062 stipulates “the Navy shall include not less than 11 operational aircraft carriers and not less than 31 operational amphibious warfare ships, of which not less than 10 shall be amphibious assault ships.” Why 11, the US War Doctrine is all about a projection of power, an ability to fight two geographical distant fronts simultaneously. This doctrine has its origin from the two world wars when wars broke out in the Atlantic and Pacific at the same time. It is important to note that out of the 11 aircraft carriers, 1/3 will normally be in maintenance and retrograde, 1/3 involved in training and only 1/3 combat ready for deployment. The longest period of deployment of an aircraft carrier was 340 days and need to return to base. An aircraft carrier cannot sail alone because by itself it is very vulnerable to attacks, hence an aircraft carrier strike group comprising 1 Aircraft Carrier with 65 to 70 aircraft, 2 Guided Missile Cruisers (loaded with 90 missiles each), 2 Anti Aircraft Warships,and 1-2 Anti Submarine Destroyers or Frigates. This combat architecture had its useful days but with the advance of long range hyper-sonic missiles and combat drone swam means this primary basis of US Power Projection has been rendered redundant. A hyper-sonic missile has a longer combat range than an aircraft and cannot be intercepted by onboard air defense system. A drone swam is cheap to launch and can easily exhaust an aircraft strike group air defense capabilities. As an ominous sign, for the first time since WWII, a killer whale was stranded in Florida last week and died. (Fig. 1).

Likewise the US aircraft carrier, a traditional symbol of US Military might, has now become a stranded killer whale when faced with a peer adversary armed with modern warfare technologies.

(i) A Single Chinese Cruiser 055 Nam Cheong chased away an entire US Carrier Strike Group (Fig. 2):

The Chinese Liaoning  battle group encountered the USS Nimitz Class Carrier Group in the West Pacific and despite Chinese warning, the USS warships tried to interject into the Chinese Carrier Group formation. 055 Nam Cheong was singularly sent ahead to intercept the US Strike Group. For 20 days Nam Cheong tagged and locked in a firing position the Carrier Group Ships which no electronic interference and intimidation by US planes or ships could shake off Nam Cheong’s precision locked ins. Should Nam Cheong fired all 48 anti-ship missiles, the entire US Strike Grouup would have been hit with no time to react yet keeping Nam Cheong safely out of the adversary’s firing range. Eventually the Nimitz Carrier Group was forced to changed directions. 055 Nam Cheong was awarded “Model of the Era” in the first week of January 2024.  This is the third time US Carrier Group was forced to retreat by a single Chinese ship or plane by tactics and advance targeting.

(ii) US Aircraft Carrier Gerald Ford Left the Mediterranean Seas after Houthis Red Sea Escalation: (Fig. 3)

As the Red Seas escalates with Houthis drones and missiles vowed to attack US and UK Ships, the newest and largest Aircraft carrier quickly left the Mediterraneans to return to home base in Virginia. Even the prime Western propaganda media, Politico was honest and admited that the sums doesn’t add up in an article titled “A $2 million missile vs a $2000 drone” (Fig. 4).

 2. Shanghai Cooperation Organization Anti-terrorism vs Mossad/CIA/Kurdish/Isis/Turkmenistan Terrorists: The whole middle east conflict is getting to be extremely complicated with Israel setting the table to pull US fully into a direct war with Iran through proxy terrorists actions. Whilst Iran tried not to engage directly, terrorists bombing within Iran by ISIS but sponsored and supported by Mossad and the CIA leaves Iran leadership little alternative but to retaliate to placate an angry Iranian population. (Fig. 5).

In a first ever long distance missile strike (1,230 km) on Jan 16, 2024 Iran hit the Turkmenistan/Israel Spy Ring terrorists through satellite guidance from SCO and on ground intelligence from Syria and Russia. The 25 minutes missile run was precisely and perfectly timed. Behind the scene, Turkiey also programmed their anti-terrorism operations against the Kurds.  In a sense, necessity dictates a line up of Iran/China/Russia/Syria/Tuekiey/Yemen/Hezbollah against the Zionists.  With little fanfare, Iran also began to enrich Uranium to 60%, a step closer to Nuclear Weapons grade. (Fig. 6).

3. North Korea tests ‘underwater nuclear weapon system’ (Fig.7): All these saber rattling is keeping the global peace loving population on the edge and Christians on their knees.

The week’s financial markets:

A. Stock Market: DJI rose 275 points for the week or  0.73% for the first week. (Fig. 8). S&P 500 rose 1.16% and Nasdaq rose 2.86% for the week.

The sell down as a reversal of over bullish sentiment from the December FOMC Powell’s pivot comes to an end and stocks were bid up led by AI stocks. All that takes was for Zuckerberg to make a Instagram Reels statement that he intends to buy $9 billion of AI Chips from Nvidia.  (Fig. 9).

Stock punters seems to forget Meta is being clobbered by Tik Tok and the Chinese won’t buy the watered down version of Nvidia chips as a result of product embargo. With 90% of US stocks owned by 10% of US households, keeping these 10% eyes fixed at the Colosseum with the Magnificent 7 Gladiator Game is a hat trick the elites must maintain.

 

B. Debt Market: (Fig. 10): USGGe10YR ended the week at 4.13%, a rate increase of 19.1 basis points.

The Fed is in a real dilemma with a need for higher rates in order to sell US Treasuries domestically or driving the private productive sector off the recession cliff.  In the meantime, my watching brief on a end Feburary liquidity crunch remains unchanged. (Fig. 11)

C. Commodities and Precious Metals: Trading results for the week: (Fig. 12) Uranium (+3.48%), NASDAQ (+2.86%), S&P 500 (+1.16%), Oil (+0.58%), Rubble (-0.24%), GBP (-0.36%), CNY (-0.37%), Eur (-0.54%), Gold (-0.85%),  JPY( -2.22%), Silver (-2.39%), and Bitcoin (-3.93%).

Again a manipulated Friday close to show USD and GBP gain from the Missiles strike on the Houthis. The rally on Bitcoin came to a close as the news of Spot Bitcoin ETF ran out of steam.

 

Revelation 14:8  And another angel followed, saying, "Babylon is fallen, is fallen, that great city, because she has made all nations drink of the wine of the wrath of her fornication." 

 

Tit for Tat or a Real War

Week ended January 13, 2023, interesting news items to look at this week were:

1. Tit for Tat or a Real War:  Last week I took my wife and adult children for a short holiday in Melbourne from early Thursday morning to late Sunday evening and so the week’s Blog is brief and somewhat short. The week earlier, my ex-colleague also visited us from Hong Kong with their adult children family, My friend’s two sons are in their forties and I am so happy to see their family traveling together for a much deserved break. Coming back to the harsh realities of Geo-politics, there is nothing to be happy about in the second week of January 2024.

(i) US and UK jointly strikes the Houthis in Yemen:  By launching an aerial assault of Yemen, US and UK just officially incriminated themselves as accomplices to the genocide in Gaza. But what a futile exercise, Western merchant ships were still effectively stopped from entering the Red Sea because the global marine insurance industry would not as a result be encouraged to write insurance policies for vessels going into that region.  The embargo just got worse. Strategically speaking, the Houthis have tied the Anglo American Empire to a long war of attrition and doing it on the cheap. This will accelerate the demise of the West.

(ii) South African ICJ Case against Israel on Genocide in Gaza: South Africa’s 84 pages filing to ICJ is cut and dry because the proof of genocidal intent of Israel against the Palestinians are all from public records from Israeli officials. Once a verdict is given, there is also no escape for US and UK as accomplices.

(iii) Taiwan Election: The Greens won despite a 60% public sentiment swing against them. A sad day for the Blue and White politicians as their infighting will cost Taiwan dearly.  

2. The Global South: During my Melbourne holidays, I went to see the Twelve Apostles in Victoria. (Fig. 1).

The Twelve Apostles are a collection of limestone stacks off the shore of Port Campbell National Park in Victoria, Australia. Eight of the original nine stacks remain standing at the Twelve Apostles' viewpoint, after one collapsed in July 2005. Mighty as these Rock columns once stood, there is no match from the relentless attack by the waves from the Antarctic. You can see from the map insert in Fig. 1 (the blue dot at the southern tip on the Australian Map is where the Twelve Apostles stands, there is nothing in between to the Antarctic.). The Western Hegemony are just like the Rock Columns of the Twelve Apostles, their days are numbered.

The week’s financial markets:

A. Stock Market: DJI rose 127 points for the week or  0.34% for the first week. (Fig. 2).

The week started sharply higher on momentum trade from the previous week but gave way to disturbing news on escalation of war in the Middle East. In fact, the US Exchange Stabilization Funds was seen in maintaining order in the various financial markets on Friday’s NY close.

B. Debt Market: (Fig. 3): USGGe10YR ended the week at 3.939%, a rate decline of 8.88 basis points.

Continued huge fiscal expenditures has propped up the Labor Market. Although headline numbers were robust but weaknesses is seen in the mainly productive side of the US economy. Liquidity in the US Credit Market continued to decline. My forecast for a liquidity crunch at the end of Fecurary 2024 remained unchanged. (Fig. 4)

C. Commodities and Precious Metals: Trading results for the week: (Fig. 5) Uranium (+15.75%), NASDAQ (+3.43%), Rubble (+3.32%), S&P 500 (+2.01%), GBP (+0.14%), Gold (+0.11%), Eur (+0.03%), Silver (-0.07%), JPY( -0.25%), CNY (-0.38%), Oil (-1.71%) and Bitcoin (-3.76%).

Another highly manipulated Friday NY Close with the US Exchange Stabilization doing massive window dressing in favour of the US Stock and Bond Market and against Oil and Precious Metals to slow down momentum against USD from the Yemen attacks. These are just background noise that fools no one.

^{Leviticus 26:38}  You shall perish among the nations, and the land of your enemies shall eat you up. ³⁹  And those of you who are left shall waste away in their iniquity in your enemies' lands; also in their fathers' iniquities, which are with them, they shall waste away. 

2024 Began with a Bang

 Week ended January 6, 2023, interesting news items to look at this week were:

1. 2024 Began with a Bang: At the close of 2023 many wished for peace and progress, sadly reality is the opposite and the flames of war continued to burn unchecked into 2024. My last week’s Blog was titled a “Decade of Struggle”, I am afraid things will further deteriorate over the next 10 years.

(i) Ukraine: In retaliation to AFU bombing of civilians at the Russian Border City of Belgorod, Russia launched the biggest missile strike against Ukraine since the SMO. (Fig. 1).

The Ukrainian strike against Russia civilians was of little military significance and likely to be a pure publicity stunt. The truth is this NATO proxy war against Russia is running out of Western financial support (Fig. 2)

as well as ammunition (Fig. 3).

At the AFU Front Line, commander of the 47^th Brigade acknowledged that AFU is fighting with what they have available, not always with what is best suited to hit their targets. (Fig. 4).

According to the very well respected Swiss Hedge Fund Manager Felix Zulauf, the AFU started with an army of 700,000 and stepped up to 900,000 but now 500,000 is gone.  State Television of Ukraine previously reported 1.1 million soldiers were killed or injured but the news was later retracted at the instruction of Zelensky. To all independent military and intelligence analysts, Ukraine and NATO have been defeated yet for Western political reasons, the cabal elites would not back down and more lives will be lost. Talk about delusional, well, if you believe CNN, it is Russia that has lost 87% of its troops and Ukraine can still win even without regaining the lost territories. (Fig. 5).

(ii) Middle East, the Gaza War is quickly escalating with:

(a) Assassination of Hamas leader Saleh al-Arouri in Lebanon when a pair of drone-fired missiles slammed into an apartment building in south Beirut. Speculation is that Israel is using this plot to lure Hezbollah into full scale war with Israel and thereby tie US into direct conflict. (Fig. 6).

(b) Blasts kill nearly 100 at slain commander Soleimani's memorial; Iran vows revenge. Could it be the dirty work of Mossad with a similar agenda to the Beirut assassination just two days earlier. (Fig. 7)

(c) From AP - An armed unmanned surface vessel launched from Houthi-controlled Yemen got within a “couple of miles” of U.S. Navy and commercial vessels in the Red Sea before detonating on Thursday, just hours after the White House and a host of partner nations issued a final warning to the Iran-backed militia group  (Fig. 8)

(d) Major Shipping Companies are avoiding the Red Sea path resulting in more economic pressure on Israel and Europe. (Fig. 9)

(iii) North Korea: North Korea fired more than 200 rounds between 9 a.m. and 11 a.m off its west coast, near South Korea’s Baengnyeong and Yeonpyeong islands, according to South Korea’s Joint Chiefs of Staff (Fig. 10)

(iv) South China Seas: In an act of provocation, USS Aircraft Carrier Carl Vinson Strike Group plan to sail with the Philippines Navy between 2^nd to 4^th January 2024 in the South China Sea. This came after a number of clashes over a rusted Philippines warship run aground on a small atoll two decades ago but refused to leave Chinese territorial waters. (Fig. 11).

By Saturday 6^th, the Aircraft Carrier Carl Vinson did not show up because on Wednesday Jan 3^rd, the PLA Missile Armed Frigate 054A Huangshan (黃山號飛彈護衛艦) was spotted in the planned route of navigation giving a much undesirable welcome to the Carrier Strike Group. (Fig. 12)

Eventually only one US Aegis Class Destroyer participated.  Guard Rails or not, it is clear that China will not waste time in proxy wars but will directly engage US when dealing with issues of sovereignty and territorial integrity.

2. Thucydides's Trap: Allow me to quote from research by Felix Zulauf. In the past 500 years, there were 16 conflicts that fell under the conditions of the Thucydides’ Trap. 12 resulted in a direct war between the sitting power and the emerging power. 3 ended with Proxy Wars and only one did not end with armed conflict. (Fig. 13).

Would China be on the right side of history.

First week  2024 financial markets:

A. Stock Market: DJI dropped 223 points or  0.59% for the first week. (Fig. 14).

The market turned bearish as there were doubts as to Powell’s Pivot Statement after the FOMC meeting.  More and more hawkish statements came out from other Fed Officials continuously. With few innovations seen in Apple i15 as well as the anticipated i16 in 2024, Apple stocks were down graded again. The market began to differentiate that Apple is not an enterprise tech stock but just a consumer tech stock.  (Fig. 15).

The concentration of funds in the Magnificat 7 with a very high valuation beyond what the US economy could sustain means the risks and reward equation is very questionable.

B. Debt Market: (Fig. 16): USGG10YR ended the week at 4.051%, a rate increase of 17.1 basis points.

Bond prices dropped by 0.47%, reflecting caution that interest rate cuts may not come as easily. Regional Banks are under tremendous pressure as Depositors continued to withdraw deposits for higher yield and less risky Money Market Funds. In 2023, we saw the largest annual money-market inflow ever - a whopping $1.151TN. (Fig. 17).

Usage of The Fed's bank bailout facility rose by another $4.5BN last week to a new record high of $136BN as banks are drained of their liquidity. (Fig. 18).

This highly subsidized bail out facility will end in March 2024 and the Fed has no political justification for its extension. What would banks do then? (Fig. 18). Will 180 banks fall like dominoes. My prediction for the liquidity crunch should come in February as reported in previous week’s Reverse Repo forecast. (Fig. 19).

Rob Arnott, Chairman of Research Affiliates commented that his research on 14 different economies over the past 53 years was that there were 31 burst of inflation above 8%. Only 2 out of 31 have inflation receded to 2% after 2 years. The rest went on to new highs or lingered on at high inflation for years. The mean result is it took 13 years to have inflation back under control.

The question is do we have such a brilliant bunch of Fed directors and ex directors like Janet Yellen or Powell that have proved themselves that they can anticipate issues and nip problems in the bud before things blow up. My take is US is a money junkie with a single printing tool, when crisis comes by their own follies, they will rob, steal and destabilize other economies to save their own skin.

C. Commodities and Precious Metals: Trading results for the week: (Fig. 20) Bitcoin (+4.66%), Oil (+2.60%), GBP (-0.18%), CNY (-0.58%), Eur (-0.95%), Gold (-0.96%), Uranium (-1.14%),  S&P 500 (-1.53%), Rubble (-1.91%), , JPY( -2.51%), Silver (-2.71%) and NASDAQ (-3.17%).

USD showed some strength as Tech Stocks were liquidated and USD bid. It will be an interesting year as Putin and Russia takes the Chair of BRICS+ and a multi-polar world is build.

Leviticus 26:14  'But if you do not obey Me, and do not observe all these commandments, 15  and if you despise My statutes, or if your soul abhors My judgments, so that you do not perform all My commandments, but break My covenant, 16  I also will do this to you: I will even appoint terror over you, wasting disease and fever which shall consume the eyes and cause sorrow of heart. And you shall sow your seed in vain, for your enemies shall eat it. 17  I will set My face against you, and you shall be defeated by your enemies. Those who hate you shall reign over you, and you shall flee when no one pursues you. 18  'And after all this, if you do not obey Me, then I will punish you seven times more for your sins.